Accessibility links

Breaking News

Report: Russian Finance Ministry Flags Exhausting Sovereign Funds

Reuters reports that a Russian Finance Ministry proposal seen by the agency warns that one of that country's two sovereign funds will have been fully depleted next year by tens of billions of dollars' worth of budget hole-plugging.

The Russian Reserve Fund stood at some $87 billion at the start of 2014 but is on track by the ministry's calculations to dwindle to zero in 2017. The same ministry proposal expects that about one-third of another fund -- intended to cover long-term budget deficits in the pension system -- will also be used up to bolster the state budget over the same period.

The ministry's proposal has been submitted to the government, according to Reuters, but not approved.

The Russian economy has been hit by low oil prices and further tripped up by Western financial sanctions imposed since its forced annexation of Crimea from Ukraine in 2014, contributing to nearly two years of uncertainty and economic contraction.

Retaliatory Kremlin countersanctions against the West have further isolated Russia's economy. The Russian budget deficit was 4.3 percent of national output in the first half of 2016.

Based on reporting by Reuters

RFE/RL has been declared an "undesirable organization" by the Russian government.

If you are in Russia or the Russia-controlled parts of Ukraine and hold a Russian passport or are a stateless person residing permanently in Russia or the Russia-controlled parts of Ukraine, please note that you could face fines or imprisonment for sharing, liking, commenting on, or saving our content, or for contacting us.

To find out more, click here.